Russia's Klondike? Not yet

BODAIBO, Russia Dec 20 (Reuters) - It looks like any one of
remote eastern Siberia's low-lying, peat-coloured hills: only
the thin trenches that scar Sukhoi Log hint at the work of
generations of geologists to measure the riches beneath.

This bleak expanse, uninviting against a steel grey sky, is
probably the world's largest virgin gold deposit, with mineral
wealth to rival the world's largest, at Grasberg in Indonesia.

Yet it has remained untapped for half a century, held back
by its remoteness, state restrictions and, in recent years, a
lack of interest on the part of a Moscow government riding the
wave of energy profits and holding out for higher gold prices.

"(The government) would love more gold, but they have no
time to think about these issues at the top level," said Sergei
Guriev, rector of the New Economic School in Moscow.

"At the lower level, people are happy with the status quo."

Soviet geologists surveyed Sukhoi Log intensively in the
1970s yet little came of it. But now the Russian government has
stirred long-dormant interest, suggesting it might invite bids
to mine the gold. While such talk has come and gone in the past
- and no details of any tender have been given - there is new
debate on how, and at what cost, the ore might be exploited.

Beyond the future of Sukhoi Log itself, the outcome could be
a litmus test for Moscow's willingness to embrace changes some
have been lobbying for in the mining sector - whether lifting a
bar to foreigners' involvement in strategic assets or simply
showing any appetite at all for turning earth into bullion.

For all the gold fever of pioneers who claimed Russia's wild
east for the tsars in the 19th century, Sukhoi Log - the name
means Dry Gully - remains a symbol of a more recent lack of
drive to mine the riches beneath the world's biggest country.
Continued...